Home loans get cheaper as HDFC cuts prime lending rates by 20 basis points
The mortgage lender Housing Development Finance Corporation (HDFC) on Friday announced to cut its retail prime lending rate (RPLR) by 20 basis points (bps) for existing customers, which in turn will reduce home loan rates for salaried customers till 7.65%. After the reduction, HDFC’s benchmark rate RPLR stands at 16.2%.
“HDFC reduces its retail prime lending rate (RPLR) on housing and non-housing loans, on which its adjustable rate home loans (ARHL) are benchmarked, by 20 bps,” the lender said in a release. The reduction in the rates are effective from Friday.
The reduced rate will benefit all existing HDFC retail home loan and non-home loan customers, the lender said. Although loan products are linked to RPLR, but the spread is different for different customers. The home loan rate for existing salaried customers is priced at 8.55% below RPLR. Therefore, the effective rate for salaried home loan customers will begin from 7.65% after the rate cut from lender.
The move comes after largest mortgage lender State bank of India (SBI) reduced its benchmark marginal cost of funds based lending rate (MCLR) by 25 bps across all tenors. SBI’s one-year MCLR, against which home loans are typically benchmarked, now stands at 7% per annum.
Reserve Bank of India (RBI) on May 22 had announced 40 bps cut in the key repo rate. The central bank has reduced repo rate by 115 bps from March,2020 till now.